Every finance guru in America has preached that having an emergency fund is the most basic and fundamental part of having a sound financial plan. Suze Orman has told us that, "Emergency cash is a necessity, not a luxury," while even Michelle Singletary has asserted that you need at least three to six months of living expenses stashed away for a "rainy day." While I understand the logic behind this, I totally disagree with putting alarming words like "emergency" and "rainy day" in such close proximity to my money.
What's appealing about saving for something bad? What's motivating about creating an account for when you lose your job or your car clunks out? What's stimulating about the thought of a major medical condition overtaking your loved one? It's no wonder 70% of America is living paycheck to paycheck! Some financial whiz thought fearing us into saving would work and unfortunately it hasn't scared us quite the way they hoped!
Associating money, something I consider positive, with an emergency, something I consider to be very real, but negative in most instances, just doesn't make sense to me. That's why I believe emergency funds are really dumb.
I believe that what you verbalize, you visualize and therefore run a greater chance of magnifying in your life. So, if you're running around asserting that you need an "emergency fund" then what will happen? You'll probably have an emergency! It's inevitable that your transmission will go out, your favorite cousin who's been dating what's his face for about 10 years will finally decide to get married and have the nerve to have a destination wedding and Christmas will miraculously seem to move up a week and catch you by surprise again this year!
So, what's my answer? . . .
The Opportunity Fund - An Alternative To The Emergency Fund
I believe we should save for opportunities and never emergencies. Why not focus on the things in life you really would like to magnify and bring forth? Why not save for a business venture, a dream vacation, a down payment on a home or some other opportunity that would serve your soul? Why not save for a sunny day; the day you actually have the money to take care of something that both matters to you and adds to your life ?
Will emergencies still arise? Of course. But, now you have the opportunity to make what would have once been a crisis a simple inconvenience. There is nothing pleasant about an emergency, but knowing that if one came up, you could handle it with ease is definitely a blessing.
How To Start Your Personal Opportunity Fund
1. Ask yourself, "If money were not an obstacle, what would I love the opportunity to be, do or have right now?" Be clear about what you're saving for. There's no way to get what you want out of life unless you know what you want out of life. Write the vision and make it plain. If you have an opportunity that makes your soul light up every time you think of it, you're bound to get in a rhythm and stick to a plan.
2. Create a savings account separate from your checking account and preferably not linked somehow to your checking account. Make sure you can access it via check writing privileges, but keep the checks out of sight. Apply the principle, "out of sight, out of mind" and stick to it. DO NOT have any type of debit or checkcard associated with this account. If you do, you'll just be cheating yourself out of your own goals.
3. Set incremental goals for the account starting with a minimum of $1000. Obviously it may take a little time to come up with $1000, but it would be an initial goal. Remember, I'm trying to get you to dream big and seize those opportunities you would like to take advantage of in your life. Whatever you are dreaming big for, better cost more than a $1000 or I'm dreaming bigger for you than you are! After you reach $1000, go for $2500 and then $5000!
4. Automate your savings. I want you to make your opportunity fund your top priority. Why? Because by doing so, you make yourself your top priority. This is not about funding your dreams if or after everybody else has been paid. This is about living your life on purpose and being strategic about how you will achieve your goals. Turn your budget upside down. You will no longer pay yourself after every one else. You will pay yourself first.
How To Start Saving For Your Opportunity Fund Today
1. If you are doing anything from the article, 5 Reasons Black Women Can't Save, cut those out immediately and you'll definitely have money for your opportunity fund in no time!
2. Try cleaning out some clutter in your home and having a garage sale physically or even virtually through sites like Craigslist.com. If you haven't used something in your home for more than 12 months, chances are you won't. So, get rid of it and save up for something that will actually serve you.
3. Turn your hobby into a side hustle and start stacking! I have clients that have hobbies that could really generate income and yet they feel bad for charging people. You'll get tired of hearing me say this, but sometimes you have to get a little selfish. This is called self-preservation! If God blessed you with a talent (aka an ability to produce wealth), stop giving it away and then complaining about being broke!
I'm fully aware that emergencies happen and I do agree that you should have cash that you can access in those times, but I truly want you to have something more than fear driving you to save. If you take nothing else from this post today, remember, that what you verbalize, you visualize and then magnify in your life. If focusing on the things that bring you joy doesn't motivate you and make you happy, what will?
Until Next Week,
Seek Wisdom, Find Wealth & Be Blessed!